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tv   Mad Money  CNBC  November 20, 2009 6:00pm-7:00pm EST

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i'm jim cramer and welcome to my world. >> you need to get in the game. >> go out of business. and he's nuts. they're nuts. they know nothing. >> i always like by say there's a bull market somewhere. >> "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you money. my job is to educate you. call me at 800-743-cnbc. only four days to make money next week, which is how i've always looked at thanksgiving week. since i realized i was a dollar sign represented by a man. given it's almost a -- every time i can recall, almost, it's a huge up week. i say let's make the most of it. what's the game plan? what we need are a couple of
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stocks that we can buy at a discount, stocks put on sale by sellers too stupid to know what they are selling. >> they know nothing! >> stocks that represent cramerican businesses. ♪ >> good earners as tony soprano might have said. all right. how about huewlett packard, whih reports monday, okay. after the close. and j. crew, which gets its report on tuesday, after the close. now, most of the time, when i like a company, i say buy it ahead of the quarter. ahead of when it reports. but, you know what, i want to use these two stocks as a demonstration of a powerful counter intuitive counter trend. some stocks, some stocks go up and up and up into a quarter.
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then sell off no matter what. no matter how well they do. that's what i'm predicting will happen right now to both hewlett packard when it reports and j. crew. let's start with hewlett packard. with dell blowing up last night, hpq would have been down, right? they have a big competitor. nope. it actually rallied. it finished up 22 cents on a not so hot day for tech. that worries me. it means people are betting hewlett packard ceo, mark herd, who makes it look easy will deliver on monday night. funny thing, i actually agree with that. their performance has been so stellar, buyers are snatching it up for weeks. every since herd, whom i call the delivery man resuscitated
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the company from a near-death experience. that's why i think hewlett packard will sell off tuesday morning, okay, no matter how great a number it reports. that's your chance to buy. it will not be easy to pull the trigger. the nature of the media ais to play pin the tail on the sell off and come up with a reason for the weakness, even if the stock shouldn't have sold off in the first place. there will be nothing wrong with hewlett packard except it went up. you are going to get a good chance to purchase this, one of my favorite technology stocks at a cheaper price. same thing for j. crew on tuesday night. the company ceo may be the best guy with the eye in the country.
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he put crew on a course to go up for years. this is another stock that goes up between quarters as everyone respects him so much. the good news will be considered in the stock and i believe it will get, yes indeed, have to do it, a crew cut the next day. what a great chance to buy one of the ultimate retailers for the holiday season. wait until wednesday, then -- buy, buy, buy. >> pull the trigger. what stocks can be bought ahead of their quarters? i'm predicting we are seeing a bull market in agriculture after the most vicious tus el i have seen in this group. deer is wednesday's business. symbol de. buy half tuesday. pull the trigger here. the rest after it reports. just in case, that will mean
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friday. just in case there is a possible unforseen glitch. i have to stick with the discipline i mentioned. i want to pick the stock up below 50. it's at $50.83. i have to be price sensitive, you should be, too. another possible winner is heinz. here is the ultimate weak dollar stock. it hasn't par tticipated much i the giant rally. see general mills, again, today. i think it would change next week. i would buy the stock around $42, looking for a kicker after it reports tuesday morning. so, writing down heinz, okay. now, there are only seven buys and 11 holds on heinz. it's not been a great stock to own. i bet one of the sideline analysts will go to hold to buy and make a splash with this
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underperforming food play. as opposed to stealer great, heinz warned this pittsburgh player has done nothing for a decade. maybe its time has come at last given the boost the crumby dollar is going to give. heinz and mike wallace, whom i dropped in the fantasy pool -- anyway. i play fantasy football and it's mostly what's on my mind. when i'm thinking college game day tomorrow, which is where i'll be. i like nat. front line, fro, is my number two fav. it reports friday. if you were around shlgts may i suggest you not buy ahead, but listen to the commentary. we need to be sure the short term upside isn't already captured. we want to be careful not to go
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nuts if they disagree with the bu bullish outlook or slashes the dividend. it could do it. by the way, their dividend is the biggest remaining. these shipping companies can be honest on their calls. remember when we got out of the dry bulk shippers? diana gave us the sign on the phone. finally, this weekend, the democrats in the senate will likely have the votes to move forward to allow debate on health care reform. it's going to generate negative headlines for the group all next week. i don't know. i don't believe any health care legislation that could pass is a serious threat to the earnings of most companies. i'm going to remind you of this. wellpoint. if the health care headlines send it down next week, that's your chance to buy. the bottom line, the game plan
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for next week is to wait until half hpq and j crew report. they have run up so much, they are bound to sell off no matter what the news and how good the numbers are. you can get in ahead of heinz, which reports tuesday morning and deer wednesday. consider wellpoint. oh, yes -- don't forget the turkey on thursday. john in texas. john. >> caller: a northern minnesota texas boo-yah. >> elongated boo-yah, what's up? >> caller: i have an offer for bristol-myers to swap my shares in meat stock except the last line says if the upper limit is
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in effect, holders will receive less than 111 in value. theoretically much less. is this a good deal? >> you'll get the stock and sell it. we recommended bristol-myers is we like the growth and the dividend. if anything else comes our way -- >> sell, sell, sell. i call north carolina -- i think it's like south carolina. go ahead. >> caller: mr. cramer, back in the time before earnings season, you ran down the foreign stocks against the dollar. favoring the brazilian utilities makes me wonder about europe and sunny spain, home of eni, symbol e. i wonder how it fits into the
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ratings. >> not one of my favs. why i recommends -- remember that was cp, after i went to penn state. you know, i don't know. 5.83%. let's understand why i picked one over the other. cpfl yields 6.9 and i think it's safe. eni 5.8 and i don't think it's any safer. that's how i make my decision. eni, cpl. next week, before thanksgiving dinner, remember hewlett packard, buy tuesday. j. crew, buy wednesday. heinz buying on tuesday. we're keeping heinz. we're going to play them. deer is wednesday, we think it will go under 50. front line, a quarter. everyone have a fantastic thanksgiving. "mad money" will be back. coming up, what does life after the health care reform
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bill mean to your portfolio? cramer goes straight to the source to find out on the executive decision. later, with a recovery in the autoindustry on the horizon, cramer is digging deep to find a speculate that could have your portfolio back on the road. plus, stay tuned as we crank up the volume. cramer goes all out as the calls keep coming in on the high impact lightning round. all come iing up on "mad money." miss out on some "mad money"? get your "mad money" text alert today. text mm to 26221 to get cramer right on your phone. for more info, visit madmoney.cnbc.com. or give us a call at 800-743-cnbc. starting now, i'm not going to blindly hope...
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tonight, we're taking a look at battleground stock. sny. the bears think they are about to fall off a cliff while the
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bulls think it has a strong bungee cord. we are going to find out which side is right tonight. candidly, i have to tell you, i'm in the bullish camp. on the one hand, by its own admission has an exper ration problem. now, drugs represent 41% of the companies sales in 2009 could go off patton in the coming years. plavix, and love knots, that represent 2.7 billion euros. they said, even in the worst case scenario, they could maintain sales. there's another drug, an analog for people with diabetes, 2.4 billion in sales. it's expected to cover the
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company. multac, a drug that treats patients with irregular heart rhythms. it's too early to tell how big it will be as it recently launched. some of the analysts say it's not big. i love the fact they can make up their mind in a couple weeks. there's a strong oncology pipeline that's ignore d by way to many investors. it was up there during the cancer research week we had. 12 are new molecular entities, essentially brand-new drugs. four of them have around 3 billion euros of sales potential. the most promising of these is a breast cancer drug we have to talk about. it's got a name that is not going to ring any bells, bs1201.
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company is the number one vaccine player worldwide. 40% share of seasonal flu vaccines. vaccines account for 10% of sales. they have done brisk business thanks to h1n1 or swine flu. that's already in the stock. a more prolonged outbreak means higher h1n1 sales. i think it's peaked. more emerging markets. 26% of sales. the company plans to cut 2 billion euros. very cost cautious company. is it a company with a troubled future or is it a under appreciated company with enough drugs to fill the gap in two or three years? the ceo is a game change r for
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the company. welcome to "mad money." >> good to meet you. >> thanks for coming on the show. >> a disease that's cured but resistant because of people's unfortunate lack of knowledge, malaria. you came out with something that sounds like the most exciting way to conquer malaria. >> we have asaq. this is a drug that's pretty interesting. you can treat people in three days and make a big difference. we manufacture this in moracco. we can treat an adult for $1 for a three-day treatment and 50 cents for a child. >> it will not be a drug we read about saying you are gouging the people taking it? >> no. this is one where we are doing the right thing. you should talk to bill clinton on this.
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i'm not kidding. if he got behind it, it would go. >> we work with the global fund and organizations like this. >> there's something in the news, "the new york times" reporting that mammograms suddenly the government says you don't need them when you are 40, you need them when you are 50. does this kind of thing, where i thought detection was a good thing make any sense to you at all? >> here is what i worry about. in the health care system, we haven't talked enough about prevention. we want to throw more treatment. there's been a huge effort to raise awareness around prevention and screening. i think we risk run ining a ste backward. we have made everybody nervous. we should error a little on the side of make sure everybody gets screened. let's prevent people from getting cancer in the first
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place. >> you use a magic phrase, as being a game changer. for people's awareness, is it something that if you had early detection you would make a difference? you are not approved, but it could be big. >> it could work in a number of tumor types. it prevents the mechanism from repairing the dna after it's attacked by cheem they arapy. you can work it in a number of tumors. extremely exciting new drug. >> we learn in december more about it? >> we are starting phase three, we will know in 2010. it's why we don't have the brand name. it's moved along so quickly. >> i never want to give people false hope. if you discover soon enough that people were doing much better that it would break open?
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>> it's a general case, if you can detect cancer early you're going to do better. >> it's been in the news, but i don't think it's going to be that big for you, the h1n1 vaccine. isn't that peaked as something you can make money on. too much sizzle and not much steak? >> you have to put a multiple of one on h1n1, right? >> actually, the whole way, if you go to the october 30th conference call, you will not hear don't worry about pat tents or this is a lay up. you were up front about what can make money and what cant which is why i want to ask you about something that's so far away, i got excited about it. this is another one where you are thinking about 2018, 2020 for the company? >> yeah, probably. what is interesting is that this provides us with about four to
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five antibodies. >> you better speak english. we trying to create growth. they are new molecule that is come along and very exciting. it's not for tomorrow. >> one thing i think you underestimated, when you have to sell for fire sale. i think merck is going your way. can it be meaningful? >> if you think about 2013, we are not unlike most companies, this has been to our industry. you come up with a great new medicine and ten years later, the patent goes. we can't come up with the next new drug when the patent gos. the strategy is not to fill a cliff, but transform the structure of the cells so we have businesses that have
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different barriers than patents. vaccines are one. they are so capital intensive and hard to make, there are only a few companies that can make them. it fill as cliff, if you like, it gives us growth going forward. animal health is in that vain. it looks like a pharmaceutical company, except in animals. you have a pets business. in the economic crisis, that has been extremely -- this has been a very stable business. then you take production animals. the population is going to increase by 50% between now and 2050. the quanty and quality of food supply. >> we are huge believers in dividends. when i read about pfizer, they cut the dividend. is that something we need to talk about? >> i think pfizer showed us the
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lesson of cutting a dividend. >> he's the ceo. thanks for coming on the show. coming up, with the autoindustry on the horizon, a speck play that could have your portfolio. lightning strikes. cramer takes your calls on a lightning round. all coming up on "mad money."
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[ thunder crashes ] [ male announcer ] an all-wheel drive v8 hybrid. one of 12 world's first innovations. the lexus ls. inspiring an industry.
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a reactive pedestrian detection system. one of 12 world's first innovations. the lexus ls. inspiring an industry. oh, excuse me, i was reading my new official guide to wall street ethics. anyway. it's my job to keep your head in
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the game. even on bla days, down days where most stocks are falling or you don't make money. i got to bust it. it can be hard keeping yourself interested doing the homework like i tell you to do. we focus on higher risk reward stock that is hold your attention no matter what. taking a chance and making a big chunk of money is as exciting at iz gets. there's a reason the pros talk about investing in the game because it can be fun as long as you free yourself from the convention conventional wisdom. don't listen to the members of the angry overbaring intelligence who say you should own only index funds or only so-called blue chip stocks. what are those? there's nothing left that's a blue chip anymore. tonight, i want to talk about an unusual "mad money"
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recommendation. it's not a tech stock or biotech name. nope. it's aun auto parts manufacturer. one that just emerged from bankruptcy november 9. i'm talking leer. the old leer seating. leer, the seating systems and electronics maker that started retrading under lea after four months in bankruptcy. leer is back. let me tell you, filing for bankruptcy was the best thing that happened to lear. if you believe in recovery, this, this is a great way to speculate on it. why lear? the company is the number two player in the auto seating, right behind johnson controls, one of my favorite stocks. there are relatively few large players in the seating business. most, cars, other than nascar
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cars have seats. the competition is limited. lear is less of a seating market than johnson controls, it should represent 81% of lear sales this year. now, despite the solid cost, cost performance, the declines in production, the garden variety depression did a lot of damage to the company. lear's profit margins is how we measure the stuff. it declined from 7% to 4.8% in 2008 then 1.4% in 2009. as low as.9%. they were making them and making a dime. then, on november 9, lear reported third quarter results. the margin came in at 7.2%. that's why i gave you all those numbers. it's an astonishing rise despite 18% decline in sales. lear's seating business is in line with the 2007, at the peak.
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imagine how much money this company is going to make when the economy recovers and we get the pin action when people start building cars, again. it should be more profitable. how has lear managed to become more profitable? it's what happens in bankruptcy. they had four months in bankruptcy. they emerges with one of the strongest capita structures of auto makers. most people don't want to touch the stocks of auto parts. we like lear for the same reason as johnson controls. before the reorganization, they had $3.5 billion in gross debt, you, $1 billion. they wiped out a lot of debt. they are expected to end with $1.5 billion cash.
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the auto supplies that avoid bankruptcy are carrying debt loads. lear bit the bullet. even as this company went through bankruptcy, continued to win business, it grew the backlog to $1.4 billion now. this company is a loved company in the car business. i bet it can win more now that it's out of chapter 11. just 30% of sales come from north america, 22% from the rest of the world. it's part of the reason the stock is on speculative friday. seating should make up 81% of lear sales, most of the growth is coming from the electrical and electronics business. it makes sense. given by 2012, 40% of the cost of the vehicle is coming from electronics. lear is one of the top companies in the electrical distribution
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markets. wireless, lighting, info for cars. if you buy lear, you are getting a company with a reputation, even before bankruptcy. they underpromised and overdelivered. in the final quarter, the company established a pattern of conservative guidance and beating it substantially. i think the numbers, estimates for 2010 are too conservative. the stocks are cheaper than the other autosuppliers. i call it 18% discount. it should be selling at a premium. it's already up 26% from where it started trading, i think it can go much higher. i know, we missed the bottom. that's okay. there's a lot of room. we know the autoindustry isn't out of the woods yet. i think lear is the autosupplier to buy, one that has the
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potential to soar. sure, it's speculative. you are getting the premium autoparts supplier for a fraction of what it's worst. that's the opportunity. scott in pennsylvania, scott. >> caller: hey, jim. >> hey, scott. what's shaking? >> caller: not much. tell me, quick, if you will, what you think of daimlor's exposure and if that's the way to play, the pick up in china or the economic recovery that may or may not be has beening in the united states. >> listen and listen good, the only autocompany i am suggesting is ford. "fortunate" magazine called steve jobs the best ceo, the
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other is ford motor. eric y new jersey. eric. >> caller: boo-yah from your neighbor in jersey. in middlesex county. >> rep shark week recently? it's a great story. >> caller: i bought a bunch of oshkosh shares for $9. >> you got horse sense. i didn't recommend it. it's at $37. >> i know. they got a big contract for $5.7 million, what should i do? >> you, my friend are being a pig and i know that bulls make money, bears make money, but pigs get slaughtered. monday morning, take your cost out. you're not going to give me a contract. come on. you're from jersey. take your money out on monday. if you want to speculate the
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autoindustry, consider seating. i think you should consider lear. lea. i think you should stay with cramer.
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it is time -- it is time for the "lightning round" on cramer's "mad money." what's that about? you say the name of the stock, i tell you to buy or sell. it's why it looks like it's all staged, but it ain't. play until you hear this sound, then the lightning round is over. are you ready, skee-daddy. it is time for the "lightning round" on cramer's "mad money." i want to start with robert in texas. robert. >> big boo-yah from texas. >> hey, hey. don't bay attention to what i'm showing. i'm showing a boomer sooner to ya. go ahead. >> caller: right, exactly. i have a question about night. you recommends it a few weeks back. >> i got killed on this. i have been recommending it for a long time.
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tj, tommy joyce came on and tells a good story for many, many years. suddenly, the story has not been good, the quarter is missed. the people are no longer buying the $3 stocks anymore. we have to have t.j. back. it's been hit by publicity to little stock speculation. i feel confused. i don't know whether to tell people to buy it or not. it seems cheap to me. i welcome tj back to the show. charles in oregon. oregon! big game. charles. >> caller: cramer. i want to send you an oregon boo-yah. >> yeah, i'm going to send you a wildcat boo-yah. go ahead. >> caller: i have a question. with the global economy gaining traction, las vegas sands reporting they are revving up on the project.
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is this a good one? >> everyone tells me people in oregon were smarter than the other 49 states. charles put me to the test. it's low single digits. it's the stock he comes to me on my show with when he knows i like wynn, which i recommend and it's still an up stock. i have to tell you. i am questioning charles' horse sense. virgil in michigan. virgil. >> caller: motown in michigan. boo-yah boo-yah boo-yah from our baby, me and my wife julia who all came from row nan ya. >> i know american stocks. hit me with something. adc. >> i take a lot of heat for recommending this stock.
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it's an internet tsunami smart phone play. i think under $6, i don't understand it at all. >> buy, buy, buy. >> okay. how about al in florida. al. al. al rhymes with tal. you are giving away $60,000 house that is used to be $300,000. >> caller: xmy computers. >> you come to me. listen to me. listen to me. you have real estate selling at 30 cents to the dollar and you come in with an indian company i don't trust. if you have to, go buy three condos before -- i would actually buy land in miami
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before i would buy that. that's a statement. jonathan in georgia. >> caller: a big boo-yah from atlanta, georgia. >> i was going to give you a georgia tech, but go ahead. >> sugar is up. increasing demand for ethanol. what about one of the biggest sugar producers? >> nope, nope, way to speculative for me. i don't want cosan. it's too dangerous. sell, sell, sell. mark in new york. mark. >> caller: hey, jim, a big boo-yah from gorgeous ithaca, new york. the birthplace of the ice cream sunday. >> really? >> caller: yeah. we just found out ourselves. the stock i'm looking at the xtex. selling at 1.4 times earnings.
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what am i missing here? >> i'll tell you what you are missing, it may be a cheap stock. i have enterprise products, i am doing a lot of propane stock work over the weekend. you are missing yield. you are missing dividends and the ability to be able to compound while doing nothing. i hate to end the lightning round, the last one of the week, on a negative thing, but your stock -- >> sell, sell, sell -- >> lightning round is over. tonight i am recommending rehab care group. this is the kind of stock you wouldn't touch with a ten-foot pole. this is the ten-foot pole i will not touch a stock with. it chipped by tooth.
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rehab care is the largest independent care operator of rehabilitation services. stop fretting and learn to touch the stocks. i'm gouk to do the whole segment with a ten-foot pole. we have a bears game sunday night. >> my wife left me with two tickets. >> your wife gave you tickets to a football game? i have been waiting for somebody to tell me some wife, some girlfriend gave a guy tickets to a football game. by the third year, they are supposed to say i did that so you would marry me. i'm a dr. phil kind of guy. people confuse us. i mean, i have espn one, two, three, four, five, a, b, c, d, e,f. this is my turf. this is my home.
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i feel like, you know, lewis from the ravens. lewis. he's probably a nice guy off camera. i like them. it's like a couple sitting in a tree. we got you out here. al, right there and in right here. you can't beat that. ouch, ouch, ouch, ouch, that's a technical term. step by step, inch by inch. i get that. hi, this is jim cramer. a cash for clunkers for home weatherization. let's get to work. they are calling it cash for caulker because you have to come up with a funny name. it's like cake. it's like icing. it's like chinese paint. don't do that at home.
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we be caulking right now. it makes all kind -- hey, better than caulk in the ear. the camera never stops. what hap? i used to ask my broker for advice. funny how the "best" funds always turned out to be his. what about the funds we bought years ago? yeah. how do we know they're still right for us? td ameritrade does mutual funds differently. with free, unbiased research. like td ameritrade's premier list. it shows me top picks, from the fund experts at morningstar associates. that's advice i can trust. and simple, powerful portfolio tools. morningstar instant x-ray helps us analyze the holdings inside our funds. yep. no more flying blind. you'll find 4- and 5-star funds from leading fund companies. plenty of no-transaction-fee funds, too. that means more of my money stays my money. and real, live investment consultants, to make it all make sense. maybe mutual funds are simple after all. at td ameritrade.
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announcer: before investing, consider the fund's investment objectives, risks, charges and expenses. contact td ameritrade for a prospectus containing this and other information. read it carefully before investing do you trust your coworkers, yes, you do, so just let go. [ groan ] okay, what did we learn there? is there such a thing as personal space, no, there isn't, because we are all molecules... in the same organism. american airlines. yeah, i need an earlier flight out of chicago. i feel like some of you don't respect me. because, ah... because of the hat. [ horns blowing, clanking ]
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on "mad money" we're all about investing in stocks. i think it's the single best play out there. but that doesn't mean you should have a blindfold on, especially as i write about the need for bonds as an asset class for any older investor who could be watching in the book getting "getting back to even." you represent someone who's billions of dollars in bonds, right? >> yes. >> i have said on this show that in my danger zone, in my sell, sell, sell, the asset that is the safest asset may be the most dangerous, which is treasuries. everyone disregarded me. you're a huge buyer of bonds. do i have any leg to stand on?
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>> there's real duration risk. if rates go up, bond prices will go down. i do think it's important for investors to focus on that. what we're seeing in the treasury market is people are focused on it. locker maturity treasuries, you have much higher yields because people are worried about interest rate risks. >> should people be in cds erk getting 1.5%? >> i think there are high quality fixed income asset classes where you can get higher returns than that. they do involve some risk but there's always a return opportunity where there is risk in the fantasticed income market there are places where investors should be. >> i always tell my people, don't reach for risk but qualified professionals know how to do it. is this something home gamers know how to analyze? or do you need a professional to pick up that yield? >> another fixed market is a skbrie gantic market. there are things where you need
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to do in depth credit analysis. we have teem taems of people in the credit markets, in the real estate credit markets. we do think it's the kind of thing you should use. you buy distressed assets from banks. maybe treasury secretary geithner who was ridiculed yesterday, which was horrible because he's doing his darn best, says maybe the plan to get toxic assets off could be good for those who buy them. do you still feel that way even though they were lower when geithner first unveiled the plan? >> yes, i do. back in february and march of this year, investors would do the analysis on these securities and many of them saw them as cheap. but when they bought them, they would lose money the next day. >> even smart guys. >> absolutely. the programs that have been put
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in place have helped stabilize the market. investors are back doing real credit analysis and there are a lot of opportunities at the mortgage markets and the commercial real estate markets that have horrible fundamentals. >> i got to stop you. you're the only other person i ever heard say anything positive about commercial real estate. you said it again in the october letter from blackrock. you think there's value in commercial mortgage. ern is telling me to run for the hills. >> housing prices, commercial real estate prices are still under pressure. i don't want to be a complete optimist about the fundamentals. they do have problems. but at the very seen or level, you have so much collateral protection, you can get high yields because everyone else is running away. the. >> i think you can learn from the master. thanks for coming on the show. "mad money" is back after the break. all right, opportunity.
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>> don't forget, the game plan. hewlett-packard, wait till tuesday. jay crew, wait till wednesday.
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deere, wait till under 50. those are your marching orders. catch me on college game day tomorrow at 10:00 a.m. eastern. there's always a bull market somewhere. i promise to find it for you on "mad money." i'm jim cramer. see you on monday. >> why shouldn't bernanke be add itted? it's our money. starting now, i'm not going to blindly hope...
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